Author: indiafreenotes

Consumer behaviour principles are applied in many areas of marketing as discussed below:

Analysing market opportunity: Consumer behaviour study helps in identifying the unfulfilled needs and wants of consumers. This requires examining the trends and conditions operating in the marketplace, consumers’ lifestyles, income levels and emerging influences. This may reveal unsatisfied needs and wants. the trend towards increasing number of dual income households and greater emphasis on convenience and leisure have led to emerging needs for household gadgets such as washing machine, mixer grinder, vacuum cleaner and childcare centres etc. Mosquito repellents have been marketed in response to a genuine and unfulfilled consumer need.

Selecting target market: A review of market opportunities often helps in identifying distinct consumer segments with very distinct and unique wants and need. Identifying these groups, learning how they behave and how they make purchase decisions enables the marketer to design and market products or services particularly suited to their wants and needs. For example, consumer studies revealed that many existing and potential shampoo users did not want to buy shampoo packs priced at Rs. 60 or more and would rather prefer a low priced sachet containing enough quantity for one or two washes. The finding led companies to introduce the shampoo sachet which became a good seller.

Marketing-mix decisions: Once unsatisfied needs and wants are identified, the marketer has to determine the right mix of product, price, distribution and promotion. Here too, consumer behaviour study is very helpful in finding answers to many perplexing questions.

• Product: The marketer designs the product or service that whould satisfy unfulfilled needs or wants. Further decisions regarding the product concern to size, shape and features. The marketer has also to decide about packaging important aspects of service, warranties and accessories etc. Nestle first introduced Maggie noodles in masala and capsicum flavours. Subsequently, keeping in view the consumer preferences in some regions, the company introduced garlic, Shambhar and other flavours.
• Price: The second important component of marketing mix is price. Marketers must decide what price to charge for the product or service. These decisions will influence the flow of revenue to the company. Should the marketer consumer price sensitive and would a lower price stimulate sales? Should there be any price discounts? Do consumers perceive lower price as being indicative of poor quality? To answer such questions, the marketer must understand the way the company’s product is perceived by consumers, the importance of price as a purchase decision variable and how different price levels would affect sales. It is only through consumer behaviour study in actual buying situations that the marketer can hope to find answers to these important issues.
• Distribution: The next decision relates to the distribution channel, that is, where and how to offer products and services for sale. Should the products be sold through all the retail outlets or only through selected ones? Should the marketer use only the existing outlets, which also sell competing brands, or should new exclusive outlets selling only the marketer’s brands be created? Is the location of retail outlets important from consumers’ point of view?  Should the company think of direct maketing?  The answer to these question are furnished by consumer behaviour research. 
• Promotion: Promotion is concerned with marketing communications to consumers, The more important methods are advertising, personal selling, sales promotion, publicity and direct marketing. The marketer has to decide which method would be most suitable to effectively reach the consumers. Should it be advertising alone or should it be combined with sales promotion? The company has to know the target consumers, their location, what media do they have access to and what are their media preferences, etc. In most cases of industrial products there is very little or no advertising. Brochures containing technical specifications are often posted to the clients and the salespeople make follow-up visits. Consumer products get the maximum share of advertising. Pharmaceutical industry exclusively use personal selling for prescription drugs. Insurance companies use both advertising and personal selling.

Use in Social and Non-profits Marketing: Consumer behaviour studies are useful to design marketing strategies by social, governmental a not-for-profit organisations to make their programmes such as family planning, awareness about AIDS, crime against women, safe driving, environmental concerns and other more effective. UNICEF (greeting cards), Red Cross and CRY etc. make use of consumer behaviour understanding to sell their services and products and also try to motivate people to support these institutions.

Consumer buying behavior is the study of an individual or a household that purchases products for personal consumption. The process of buying behavior is shown in the following figure:

Consumer decision-making is a complex process influenced by various factors. Understanding this process is crucial for marketers to develop effective strategies that align with consumers’ needs and preferences.

Problem Recognition:

Problem recognition is the first step in the consumer decision-making process. It occurs when consumers perceive a discrepancy between their current state and a desired state. This recognition can be triggered by internal factors like physiological needs (e.g., hunger) or psychological needs (e.g., the desire for status). External factors, such as marketing stimuli or environmental changes, can also play a role. For instance, a consumer may realize the need for a new laptop because their current one is slow and outdated.

Triggers of Problem Recognition:

• Internal Stimuli: Internal factors such as physiological needs, psychological desires, or changes in personal circumstances can trigger problem recognition. For example, hunger may lead to the recognition of a need for food.
• External Stimuli: External influences, including marketing efforts, societal trends, or environmental changes, can play a significant role. Advertising, for instance, can create awareness of a product or service, sparking the recognition of a need.

Significance of Problem Recognition:

• Initiating the Decision-Making Process: Problem recognition is the catalyst for the entire decision-making process. Without recognizing a need, consumers would have no reason to embark on the journey of considering, evaluating, and ultimately making a purchase.
• Setting Priorities: It helps consumers prioritize their needs and allocate resources accordingly. The perceived urgency and importance of the need influence the subsequent steps in the decision-making process.
• Opportunity for Marketers: For marketers, understanding the triggers of problem recognition provides an opportunity to position their products or services as solutions to consumers’ needs. Effective advertising and marketing campaigns can stimulate problem recognition and create demand.

Example Scenario:

Consider a consumer who experiences a malfunction in their laptop, hindering their ability to work efficiently. The internal stimulus here is the inconvenience caused by the malfunction. Simultaneously, external stimuli like online advertisements for the latest laptops with enhanced features may contribute to the recognition of a need for a new, more advanced laptop.

Marketing Implications:

• Creating Awareness: Marketers can use various channels to create awareness of their products, emphasizing how these products address specific needs or desires.
• Highlighting Solutions: Advertising should not only create awareness but also highlight how a product or service solves the consumer’s problem, making their life better or more convenient.
• Timing of Marketing Messages: Understanding the timing of problem recognition is crucial. Marketers can tailor their messages to coincide with when consumers are most likely to recognize a need, such as during certain life events or seasonal changes.

Challenges in Problem Recognition:

• Unconscious Needs: Some needs may be subconscious or latent, requiring marketers to delve deeper into understanding consumer motivations and desires.
• Competing Influences: External stimuli can be numerous and competing, making it challenging for marketers to ensure their product stands out as a solution.

Methods of Problem-Solving:

• Routine Decision-Making:

In routine decision-making, consumers make low-involvement, habitual choices. This often involves purchasing familiar products without extensive consideration. For example, buying a preferred brand of toothpaste.

Characteristics:

• Low Involvement: Consumers do not engage in extensive information search or evaluation.
• Habitual Choices: Consumers rely on habits, past experiences, and brand loyalty.
• Frequent Purchases: Products like daily groceries or personal care items often fall into this category.

 

• Limited Decision-Making:

Limited decision-making occurs when consumers have some prior experience with a product but still seek additional information before making a decision. This may involve reading product reviews or comparing prices before purchasing.

Characteristics:

• Moderate Involvement: Consumers invest some effort in information search and evaluation.
• Prior Experience: Consumers may have some familiarity with the product category.
• Limited Information Search: Consumers gather information but may not extensively compare all available options.

Example Scenario:

Choosing a new smartphone by considering features, reading a few online reviews, and comparing prices before making a purchase.

 

• Extensive Decision-Making:

Extensive decision-making is reserved for significant, high-involvement purchases. Consumers engage in extensive research, considering multiple options, and evaluating various features and benefits. Examples include buying a car or choosing a university.

Characteristics:

• High Involvement: Consumers invest considerable time and effort in information search and evaluation.
• Significant Purchases: Products like a car, house, or higher education often involve extensive decision-making.
• Comprehensive Information Search: Consumers explore a wide range of sources, seeking detailed information and comparing alternatives.

Example Scenario:

Selecting a university for higher education involves researching multiple institutions, comparing programs, considering faculty, and weighing factors like location and reputation.

Implications for Marketers:

Understanding the methods of problem-solving is essential for marketers as it helps them tailor their strategies based on the level of consumer involvement and decision complexity.

• Routine Decision-Making: Marketers focus on brand loyalty, advertising frequency, and creating positive habits associated with the product.
• Limited Decision-Making: Providing easily accessible information, highlighting key features, and addressing common concerns can influence consumer decisions.

• Extensive Decision-Making: Marketers should emphasize detailed product information, offer comparative tools, and provide extensive support to guide consumers through the decision-making process.

Pre-purchase Search Influences:

Personal Factors:

Personal factors play a significant role in influencing the pre-purchase search process. These factors are intrinsic to the individual consumer and include:

• Individual Needs: The specific needs and requirements of the consumer drive the search. For example, a person in need of a new laptop for work purposes may focus on specifications such as processing power and storage capacity.
• Lifestyle: Consumer lifestyles influence the types of products or services they seek. An active, health-conscious lifestyle may lead to searches for fitness equipment or nutritious food options.
• Values and Beliefs: Personal values and beliefs shape the criteria consumers use in their search. For instance, an environmentally conscious consumer may prioritize products with eco-friendly certifications.

Psychological Factors:

Psychological influences impact how consumers perceive and process information during the pre-purchase search. Key psychological factors include:

• Perception: How consumers perceive products or brands can significantly influence their search behavior. Positive past experiences or brand associations may lead to biased information searches.
• Motivation: Consumer motivation drives the intensity of the search. Higher motivation may lead to more extensive research efforts, especially for products or services with significant personal or financial implications.
• Learning: Past experiences and learning play a role in shaping consumer preferences. Positive experiences with a brand may lead to brand loyalty, while negative experiences can prompt consumers to explore alternatives.

Social Factors:

Social influences have a substantial impact on the pre-purchase search process. Consumers often seek information and opinions from their social circles, including:

• Word of Mouth: Recommendations from friends, family, or colleagues can greatly influence the search process. Positive reviews or testimonials may prompt consumers to consider a particular product or brand.
• Social Media: Platforms like Facebook, Instagram, and Twitter serve as sources of information and reviews. Social media influencers can also sway consumer opinions and choices.
• Cultural and Societal Trends: Larger cultural and societal trends may influence what products or services consumers search for. For example, an increasing focus on sustainability may lead consumers to seek eco-friendly products.

Economic Factors:

Economic considerations, including the financial situation of the consumer, can impact the pre-purchase search:

• Budget Constraints: Consumers often search for products within a certain budget range. Price comparison websites and reviews related to product value become crucial in this context.
• Promotions and Discounts: Special promotions, discounts, or limited-time offers may stimulate pre-purchase searches. Consumers may actively seek information on the best deals available.

Technological Factors:

The advent of technology, particularly the internet, has transformed the pre-purchase search process:

• Online Reviews and Ratings: Consumer reviews on e-commerce websites, forums, and review platforms heavily influence pre-purchase decisions. Positive reviews can build trust and confidence in a product or service.
• Comparison Websites: Consumers frequently use comparison websites to evaluate different products or services based on features, prices, and user reviews.
• E-commerce Platforms: The convenience of online shopping has led to increased pre-purchase searches on e-commerce platforms. Consumers can easily compare products, read reviews, and make informed decisions.

Implications for Marketers:

Understanding the influences on pre-purchase search is crucial for marketers aiming to connect with consumers during this information-seeking stage:

• Content Marketing: Creating informative and engaging content that addresses consumer needs and concerns can attract attention during the pre-purchase search.
• Social Media Engagement: Maintaining an active and positive presence on social media platforms allows brands to participate in conversations and respond to consumer inquiries and feedback.
• Online Reputation Management: Managing online reviews and actively addressing customer concerns contributes to a positive brand image and influences the pre-purchase search process.

• Digital Marketing Strategies: Leveraging digital marketing channels, including search engine optimization (SEO), targeted advertising, and influencer partnerships, enhances a brand’s visibility during the pre-purchase search.

Information Search:

Consumers seek information through various sources:

1. Internal Sources:

Internal sources involve using information stored in memory based on past experiences, knowledge, and attitudes. Consumers rely on their own thoughts and past interactions with products or services.

• Personal Experience: Memories of past experiences with a product or service can shape preferences and influence decision-making.
• Prior Knowledge: Existing knowledge about a product category gained through education, research, or personal interest can guide the information search.
• Attitudes and Beliefs: Personal beliefs and attitudes towards certain brands or features can serve as internal sources of information.

2. External Sources:

External sources encompass information obtained from outside oneself. Consumers seek information from various external sources to gain a broader perspective and make more informed decisions.

• Personal Contacts: Recommendations and advice from friends, family, colleagues, or acquaintances can be powerful influencers. Word of mouth plays a significant role in shaping perceptions.
• Commercial Sources: Information provided by businesses through advertising, promotional materials, and sales representatives. Marketers use various channels, such as TV, radio, print, and online platforms, to disseminate information.
• Public Sources: Information from public sources such as consumer reports, product reviews, and expert opinions. Consumers often turn to these sources for unbiased assessments.
• Experiential Sources: Consumers may engage in hands-on experiences or product trials to gather information. Testimonials, demonstrations, and samples fall into this category.

3. Online Sources:

With the rise of the internet, online sources have become increasingly important in the information search process.

• Search Engines: Consumers use search engines like Google to find information about products, reviews, and specifications.
• Social Media: Platforms such as Facebook, Twitter, and Instagram play a crucial role in influencing opinions. Consumers may seek recommendations and read comments and reviews.
• Review Websites: Dedicated review websites and forums allow consumers to share their experiences and read reviews from others.
• E-commerce Platforms: Online shopping websites provide detailed product information, customer reviews, and the ability to compare products.

4. Experiential Sources:

Experiential sources involve firsthand interaction with a product or service. Consumers may engage in various activities to gain direct experience, including:

• Product Testing: Trying out a product before making a purchase decision, commonly seen in industries like electronics or cosmetics.
• In-Store Displays: Physical retail stores provide opportunities for consumers to interact with products on display.
• Product Samples: Offering free samples or trial versions allows consumers to experience a product’s features and benefits.

Implications for Marketers:

Understanding the sources of information consumers rely on during the information search stage is crucial for marketers to tailor their strategies effectively:

• Content Marketing: Creating informative and engaging content that addresses consumer needs and concerns can attract attention during the information search.
• Online Presence: Maintaining an active and positive presence on online platforms is essential. This includes social media, e-commerce websites, and review platforms.
• SEO Strategies: Optimizing online content for search engines enhances visibility, making it easier for consumers to find relevant information.
• Consumer Education: Providing easily accessible and accurate information helps consumers make informed decisions. Educational content can establish a brand as a trusted source of information.

• Influencer Collaborations: Partnering with influencers or experts in the industry can amplify a brand’s message and provide additional credibility.

Alternative Evaluation and Selection:

After conducting an information search, consumers move on to the stage of alternative evaluation and selection. This phase involves comparing and contrasting different alternatives to make a decision about which product or service to purchase. Various factors influence this stage, ranging from individual preferences to external influences.

1. Perceived Value:

Perceived value is a crucial factor in the evaluation of alternatives. Consumers assess the benefits they expect to receive from a product or service against the cost, both monetary and non-monetary. This assessment contributes to the perceived value of each alternative.

• Features and Benefits: Consumers evaluate the features and benefits offered by each alternative. Products that align closely with their needs and preferences are perceived as having higher value.
• Price: The cost of the product or service relative to its perceived benefits influences the perceived value. Consumers often seek a balance between quality and affordability.

2. Brand Reputation:

Brand reputation plays a significant role in the evaluation process. Consumers may have preconceived notions about a brand based on past experiences, advertising, or word-of-mouth.

• Trust and Credibility: Established brands with a history of delivering quality products build trust. Positive reviews and testimonials contribute to the credibility of a brand.
• Brand Loyalty: Consumers may prefer brands they have used before and had positive experiences with, leading to a higher likelihood of selecting products from those brands.

3. Personal Preferences:

Individual preferences and tastes greatly influence the evaluation of alternatives. Consumers are drawn to products that align with their lifestyle, values, and aesthetic preferences.

• Aesthetic Appeal: The visual appeal of a product, including design, colors, and packaging, can influence the decision-making process.
• Personal Values: Consumers may prioritize products that align with their values, such as environmental sustainability or ethical production practices.

4. Decision Heuristics:

Decision heuristics are mental shortcuts or rules of thumb that consumers use to simplify the decision-making process. Common heuristics include:

• Brand Loyalty: Preferring a familiar brand without extensive consideration of alternatives.
• Price as an Indicator: Assuming that higher-priced products are of higher quality.
• Country of Origin: Associating certain countries with quality or specific attributes.

5. Social Influences:

Social factors continue to influence the evaluation and selection of alternatives. Peer opinions, recommendations, and societal trends can impact consumer choices.

• Word of Mouth: Recommendations from friends, family, or colleagues carry significant weight. Positive word of mouth can sway consumer decisions.
• Social Trends: Following trends and conforming to societal norms may influence the evaluation of alternatives. Products that align with popular trends may be more appealing.

6. Online Reviews and Ratings:

Online reviews and ratings, often accessed during the information search stage, continue to be influential during the evaluation of alternatives.

• User-generated Content: Consumers trust the opinions of fellow consumers. Positive reviews and high ratings contribute positively to the evaluation of a product.
• Critical Reviews: Negative reviews and critical feedback can also impact the evaluation. Brands that respond to criticism and address concerns demonstrate responsiveness.

7. Decision Rules:

Decision rules are criteria or standards that consumers use to guide their choices. These rules can be conjunctive (setting minimum standards for each attribute), disjunctive (looking for one attribute that stands out), or lexicographic (prioritizing attributes in order of importance).

• Conjunctive Rules: Consumers might set minimum standards for essential attributes. A product must meet these standards to be considered.
• Disjunctive Rules: Consumers may focus on a single attribute that stands out, such as an outstanding feature or a particularly low price.
• Lexicographic Rules: Consumers prioritize attributes and select the alternative that performs best on the most important attribute.

Implications for Marketers:

Understanding the factors that influence alternative evaluation and selection is vital for marketers seeking to position their products favorably in the minds of consumers:

• Value Proposition: Clearly communicate the value proposition of the product, emphasizing features, benefits, and how it addresses consumer needs.
• Brand Building: Invest in building a positive brand image through quality products, transparent communication, and positive customer experiences.
• Understanding Preferences: Tailor marketing messages and product offerings to align with the preferences and values of the target audience.
• Social Proof: Encourage positive reviews and testimonials. Engage with consumers on social media and leverage user-generated content to build trust.
• Competitive Pricing: Consider pricing strategies that align with the perceived value of the product, offering a competitive advantage in the market.

• Innovative Design: Pay attention to product aesthetics and design, as these factors can significantly influence consumer preferences.

Outlet Selection:

After consumers evaluate and select a preferred product or service, the next step in the consumer decision-making process is outlet selection. This stage involves choosing where to make the purchase. Various factors influence outlet selection, ranging from convenience to the overall shopping experience.

1. Convenience:

Convenience is a major factor in outlet selection. Consumers often choose outlets that are easily accessible and fit into their daily routines.

• Location: The proximity of the outlet to the consumer’s home, workplace, or frequently visited areas influences the convenience of making a purchase.
• Operating Hours: Consumers prefer outlets with extended operating hours, allowing flexibility in when they can make their purchases.

2. Assortment of Products:

Consumers may choose outlets based on the variety and availability of products. Larger stores or online platforms with a diverse range of products may be preferred.

• Product Availability: Consumers prefer outlets where they can find the specific product they are looking for without having to visit multiple locations.
• Product Quality: Outlets known for offering high-quality products may attract consumers seeking assurance in their purchases.

3. Pricing and Discounts:

Pricing plays a crucial role in outlet selection. Consumers often seek the best deals and discounts.

• Competitive Pricing: Outlets offering competitive prices compared to other options in the market may attract cost-conscious consumers.
• Promotions and Discounts: Special promotions, discounts, or loyalty programs can influence outlet selection, encouraging repeat business.

4. Brand Reputation:

The reputation of the outlet or retailer can impact consumer choices. Established and reputable outlets may be perceived as more trustworthy.

• Brand Recognition: Outlets associated with well-known and trusted brands may be favored by consumers.
• Customer Reviews: Positive reviews and feedback from other consumers contribute to the overall perception of an outlet.

5. Customer Service:

The level of customer service provided by an outlet can significantly influence consumer satisfaction and loyalty.

• Friendly Staff: Courteous and helpful staff contribute to a positive shopping experience.
• Return Policies: Consumer-friendly return and exchange policies can instill confidence in the outlet.

6. Online vs. Offline:

With the growth of e-commerce, consumers must decide between purchasing from physical stores or online platforms.

• Online Platforms: Convenience, ease of comparison, and the ability to shop from anywhere contribute to the popularity of online outlets.
• Physical Stores: Some consumers prefer the in-person experience, being able to touch and feel products before making a purchase.

7. Atmosphere and Ambiance:

For physical stores, the atmosphere and ambiance can impact outlet selection.

• Store Layout: An organized and visually appealing store layout can enhance the overall shopping experience.
• Cleanliness and Comfort: A clean and comfortable environment contributes to a positive impression.

8. Social and Cultural Factors:

Social and cultural influences can also play a role in outlet selection.

• Peer Recommendations: Recommendations from friends or family members may sway outlet choices.
• Cultural Relevance: Outlets that align with cultural values or trends may be more appealing to certain consumer segments.

Implications for Marketers:

Understanding the factors influencing outlet selection allows marketers to tailor strategies to meet consumer preferences:

• Strategic Location: Consider the location of physical stores to maximize convenience for the target audience.
• Competitive Pricing Strategies: Employ pricing strategies that offer value to consumers, whether through competitive pricing or attractive promotions.
• Online Presence: Invest in user-friendly online platforms, emphasizing convenience and security in the online shopping experience.
• Customer Service Excellence: Prioritize customer service training for staff to enhance the overall shopping experience.
• Branding and Reputation Management: Build and maintain a positive brand image through effective branding and reputation management efforts.

• Adaptation to Cultural Trends: Stay attuned to cultural trends and preferences, adjusting marketing strategies accordingly.

Purchase Decision:

The purchase decision is the final stage in the consumer decision-making process, where consumers commit to buying the chosen product or service from a specific outlet. This stage involves the culmination of the preceding steps, including problem recognition, information search, alternative evaluation, and outlet selection. Several factors influence the purchase decision, and understanding these factors is crucial for marketers.

1. External Influences:

External factors continue to play a role in the purchase decision, even at the final stage. These external influences can include:

• Promotions and Discounts: Special promotions, discounts, or limited-time offers can serve as catalysts for making the purchase decision.
• Peer Recommendations: Positive word-of-mouth from friends, family, or colleagues can affirm the consumer’s choice and contribute to the decision to make a purchase.
• Social Proof: Positive online reviews, ratings, and testimonials can provide additional reassurance and influence the final decision.

2. Marketing Communications:

Marketing efforts and communications can impact the purchase decision:

• Advertising: Consistent and persuasive advertising messages can reinforce the consumer’s choice and create a sense of urgency.
• Branding: Strong and positive brand associations can influence the perceived value of the product or service, contributing to the purchase decision.
• Point-of-Sale Displays: In-store or online displays can capture the consumer’s attention at the critical moment of decision-making.

3. Perceived Risk:

Consumers often assess the perceived risk associated with the purchase. This risk can be financial, performance-related, or related to psychological factors.

• Financial Risk: Concerns about whether the product is worth the price paid.
• Performance Risk: Worries about the product’s functionality and whether it will meet expectations.
• Psychological Risk: Fear of making the wrong decision or concerns about how the purchase reflects on the consumer.

4. Post-Purchase Evaluation:

While technically occurring after the purchase decision, post-purchase evaluation can influence future decisions and brand loyalty:

• Satisfaction: The level of satisfaction with the purchase directly impacts the likelihood of repeat business and positive word-of-mouth.
• Cognitive Dissonance: Consumers may experience cognitive dissonance, a feeling of discomfort or doubt after a significant purchase. Marketers can address this through post-purchase communication and support.

5. Ease of Purchase:

The ease and convenience of the purchase process can impact the decision to buy:

• Checkout Process: For online purchases, a streamlined and user-friendly checkout process can reduce friction and encourage completion.
• Payment Options: Providing a variety of payment options can cater to different consumer preferences.

6. Emotional Factors:

Emotional factors can heavily influence the purchase decision:

• Brand Loyalty: Positive emotions associated with a brand or product can lead to repeat purchases.
• Impulse Buying: Emotional triggers, such as excitement or desire, can lead to impulse buying decisions.

7. Environmental Factors:

The physical environment or context in which the purchase decision occurs can also play a role:

• In-Store Atmosphere: For physical retail locations, factors like store layout, lighting, and ambiance can impact the purchase decision.
• Online Shopping Experience: The user interface, website design, and overall online shopping experience contribute to the purchase decision for e-commerce.

Implications for Marketers:

Understanding the dynamics of the purchase decision stage allows marketers to optimize their strategies for greater success:

• Last-Minute Incentives: Consider offering last-minute incentives, such as exclusive discounts or limited-time promotions, to encourage immediate purchase decisions.
• Post-Purchase Engagement: Implement post-purchase communication strategies to address potential concerns, gather feedback, and build a positive post-purchase experience.
• Emotional Connection: Strengthen emotional connections with consumers through branding, storytelling, and marketing messages that resonate with their values and aspirations.
• Optimized Checkout Process: Streamline the online purchasing process, reducing friction points to enhance ease and convenience.

• Customer Support: Provide accessible and responsive customer support to address any post-purchase concerns promptly.

The buying behavior of consumer is affected by a number of factors which are generally uncontrollable. These factors are also known as determinants of consumer buying behavior. All these factors affect the buying behavior of consumer differently.

I) Cultural factors affecting consumer buying behavior:

1) Culture: Culture affects a lot the consumer buying behavior. It is the family values, beliefs, perceptions and preferences affect the consumer buying behavior.

2) Subculture: The culture includes subculture in it include nationality, religious group, and communities etc. which affect the consumer behavior.

3) Social class: It means to divide the society in different social classes, the members of different social class has different likings.

II) Social factor affecting consumer behavior:

1) Family: The members of family also affect the buying behavior of consumer. Family includes of:

• Influencer: The person who senses the need to buy a product.
• Decider: The person who takes final decision to buy the product.
• User: The person who finally uses the product.

2) Reference group: Family alone does not affect the consumer buying behavior but also the group outside the family also affects the consumer behavior. It includes the persons with whom we interact like friends, neighbors, co- workers etc.

3) Role and status: Role played by the person in the society are so many. Like a person plays the role of son, husband, brother, father, businessman etc. in his life. So the consumer buying behavior depends upon the role played by him.

III) Personal factors affecting consumer behavior:

1) Age and life style: The consumer buying behavior changes with the change in the age. Like very small child need toys to play with them and when they grow they need games, computer etc. thus, liking of consumer changes with the age.

2) Occupation: Occupation also affects the consumer behavior to buy the goods. Like an worker needs simple clothes while his boss needs expensive designer suits to wear.

3) Income: The income also affects the consumer buying behavior because if the person is rich he can buy anything which he wants to buy but for a poor person it is not be easy to buy the things which are beyond his pocket.

4) Life style: It is the way of living of the person. Like some people like luxury livings while some in simple living.

5) Personality: personality includes extrovert or introvert which also affects the consumer buying behavior.

IV) Psychological factors affecting consumer behavior:

1) Motivation: When the buyer’s need is raised to a particular level they become the motives which mean “I want to achieve this” which ultimately affect the consumer buying behavior.

2) Perception: This is how the consumer receives, selects and organizes the information which helps him in buying the goods.

3) Learning: Learning experience is helpful in affecting consumer buying behavior.

4) Beliefs and attitude: Belief means the opinion or mind set relating to a particular object; attitude means the feeling of buyer towards the object. So the marketer should keep in mind the beliefs and attitude of the consumer.

Thus, all these buying characteristics influence consumer buying behavior.

Consumer decision-making varies with the type of buying decision. There are great differences between buying toothpaste, a tennis racket, a personal computer, and a new car. Complex and expensive purchases are likely to involve more buyer deliberation and more participants.

Involvement is the perceived importance or personal relevance of an object or event. It is about the degree to which the consumer feels attached to the product or brand, and the loyalty felt towards it. Involvement has both cognitive and affective elements: it plays on both the brain and the emotions. For example, a car owner might say, ‘I love my old Ambassador [affect] because it never lets me down [cognition]. There can be 3 levels of involvement:

1. Low level of involvement occurs if attributes are irrelevant to consequences
2. Medium level of involvement occurs if the attributes only link to function
3. High product involvement will come about if the consumer feels that product attributes are strongly-linked to end goals or values. Although it is the behaviour of the decision-maker that determines the level of involvement of a decision,.

There are 3 common factors, which increase the likelihood of high involvement. These are:

1. The cost of purchase relative to income
2. The amount of time for which the purchase will be owned
3. The extent to which the purchase reflects the self-image

High-involvement purchases are those products, which figure greatly in the consumer’s lifestyle. In other words, they involve decisions which is important to get right, preferably first time. Typically, the products with which the consumer is highly involved will also be the ones which the consumer knows most about, and about which he or she has strong opinions.

Following table compares high-involvement, medium-involvement and low involvement considerations.

TABLE: Comparison of involvement levels

High Involvement	Medium involvement	Low involvement
Attributes strongly linked to end goals	Attributes only link to function	Attributes irrelevant to consequences
Important to get it right first time	Need to have reasonably reliable results	Results perceived to be the same whichever product chosen
Consumer has in-depth knowledge and strong opinions	Consumer has knowledge of the product group, no strong feelings	No strong feelings, knowledge of product group irrelevant
Discrepant information ignored or discounted	Discrepant information considered carefully	Discrepant information ignored

For example, a technology-savvy IT professional might have very strong views on which PC would give the best performance. Discrepant information (a salesperson’s attempt to persuade him to try another brand, for example) is discounted and disparaged, and may even lower the esteem of the source of the information (the IT professional will think the salesperson is stupid, or is trying to unload an inferior brand of computer).

On the other hand, a computer novice is less likely to have formed a close involvement with a product and hence is more likely to be prepared to listen to what the salesperson has to say. This means that high-involvement consumers are hard to persuade; they are not be easily swayed by advertising or even by persuasive sales pitches.

High involvement always has a strong affective component, and this does not necessarily mean a high cost commitment. People also fall in love with cheap products. So involvement does not always equate to price. A high-involvement good is not necessarily a high-priced one, nor is a low-involvement good necessarily a cheap one. Smokers can become very involved with their brand of cigarettes costing very few (Take the example of bidi or Charminar cigarette). Conversely, some people may not get involved deeply with a highly costly 5-star hotel.

Assael distinguished four types of consumer buying behaviour based on the degree of buyer involvement and the degree of differences among brands. The four types are named in the following table and described in the following paragraphs.

TABLE: Four Types of buying behaviour

Level of Significances Between Brands	High Involvement	Low Involvement
Significant	Complex Buying Behaviour	Variety-seeking Buying Behaviour
Few	Dissonance-reducing Buying Behaviour	Habitual Buying Behaviour

1. Complex Buying Behaviour:

Consumers go through complex buying behaviour when they are highly involved in a purchase and aware of significant differences among brands. Consumers are highly involved when the product is expensive, bought infrequently, risky and highly self-expressive. Typically the consumer does not know much about the product category and has much to learn. F01 example, a person buying a personal computer may not know what attribute to look for. Many of the product features like “16K.memory” “disc storage”, “screen resolution” carry no meaning to him or her.

This buyer will pass through a learning process characterized by first developing beliefs about the product, then attitudes, and then making a thoughtful purchase choice. The marketer of a high-involvement product must understand the information-gathering and evaluation behaviour of high-involvement consumers.

The marketer needs to develop strategies that assist the buyer in learning about the attributes of the product class, their relative importance, and the high standing of the company’s brand on the more important attributes. The marketer needs to differentiate the brand’s features, use mainly print media and long copy to describe the brand’s benefits, and motivate store sales personnel and the buyer’s acquaintances to influence the final brand choice.

2. Dissonance-Reducing Buying Behaviour:

Sometimes the consumer is highly, involved in a purchase but sees little difference in the brands. The high involvement is again based on the fact that the purchase is expensive, infrequent, and risky. In this case, the buyer will shop around to learn what is, available but will buy fairly quickly because brand differences are not pronounced. The buyer may respond primarily to a good price or to purchase convenience.

After the purchase, the consumer might experience dissonance that stems from noticing certain disquieting features of the product or hearing favourable things about other brands. The consumer will be alert to information that might justify his or her decision. The consumer will first act, then acquire new beliefs and end up with a set of attitudes. Here marketing communications should aim to supply beliefs and evaluations that help the consumer feel good about his or her brand choice.

3. Habitual Buying Behaviour:

Many products are bought under conditions of low consumer involvement and the absence of significant brand differences. Consider the purchase of salt. Consumers have little involvement in this product category. They go to the store and reach for the brand. If they keep reaching for the same brand, it is out of habit, not strong brand loyalty.

There is good evidence that consumers have low involvement with most low-cost, frequently purchased products. Consumer behaviour in these cases does not pass through the normal belief/attitude/behaviour sequence. Consumers do not search extensively for information about the brands, evaluate their characteristics, and make a weighty decision on which brand to buy.

Instead, they are passive recipients of information as they watch television or see print ads. Ad repetition creates brand familiarity rather than brand conviction. Consumers do not form a strong attitude towards a brand but select it because it is familiar. After purchase, they may not even evaluate the choice because they are not highly involved with the product. So the buying process is brand beliefs formed by passive learning, followed by purchase behaviour, which may be followed by evaluation.

Marketers of low-involvement products with few brand differences find it effective to use price and sales promotions to stimulate product trial, since buyers are not highly committed to any brand. In advertising a low-involvement product, a number of things should be observed. The ad copy should stress only a few key points Visual symbols and Imagery are important because they can easily be remembered and associated with the brand.

The ad campaigns should go for high repetition with short- duration messages. Television is more effective than print media because it is a low-involvement medium that is suitable for passive learning. Advertising planning should be based on classical conditioning theory where the buyer learns to identify a certain product by a symbol that is repeatedly attached to it.

Marketers can try to convert the low-involvement product into one of higher involvement. The ways are:

1. This can be accomplished by linking the product to some involving issue, as when Crest toothpaste is linked to avoiding cavities.
2. The product can be linked to some involving personal situation, for instance, by advertising a coffee brand early in the morning when the consumer wants to shake oft sleepiness.
3. The advertising might seek to trigger strong emotions related to personal values or ego defense.
4. An important product feature might be added to a low-involvement product, such as by fortifying a plain drink with vitamins,

These strategies at best raise consumer involvement from a low to a moderate level, they do not propel the consumer into highly involved buying behaviour.

4. Variety-Seeking Buying Behaviour:

Some buying situations are characterised by low consumer involvement but significant brand differences. Here consumers are often observed to do a lot of brand’ switching. An example occurs in purchasing cookies. The consumer has some beliefs, chooses a brand of cookies without much evaluation, and evaluates it during consumption. But next time, the consumer may reach for another brand out of boredom or a wish for a different taste. Brand switching occurs for the sake of variety rather than dissatisfaction.

The marketing strategy is different for the market leader and the minor brands in this product category. The market leader will try to encourage habitual buying behavior by dominating the shelf space, avoiding out-of-stock conditions, and sponsoring frequent reminder advertising. Challenger firms will encourage variety seeking by offering lower prices, deals, coupons, free samples and advertising that presents reasons for trying something new.

Features of Consumer Behaviour:

1) Consumer behaviour and marketing management: Effective business managers realise the importance of marketing to the success of their firm. A sound understanding of consumer behaviour is essential to the long run success of any marketing program. In fact, it is seen as a comerstone of the Marketing concept, an important orientation of philosophy of many marketing managers. The essence of the Marketing concept is captured in three interrelated orientations consumers needs and wants, company integrated strategy. 

2) Consumer behaviour and non profit and social marketing: In today’s world even the non-profit organisations like government agencies, religious sects, universities and charitable institutions have to market their services for ideas to the “target group of consumers or institution.” At other times these groups are required to appeal to the general public for support of certain causes or ideas. Also they make their contribution towards eradication of the problems of the society. Thus a clear understanding of the consumer behaviour and decision making process will assist these efforts

3) Consumer behaviour and government decision making: In recent years the relevance of consumer behaviour principles to government decision making. Two major areas of activities have been affected: 

i) Government services: It is increasingly and that government provision of public services can benefit significantly from an understanding of the consumers, or users, of these services.

ii) consumer protection: Many Agencies at all levels of government are involved with regulating business practices for the purpose of protecting consumers welfare.

4) Consumer behaviour and demarketing: It has become increasingly clear that consumers are entering an era of scarcity in terms of some natural gas and water. These scarcities have led to promotions stressing conservation rather than consumption. In other circumstances, consumers have been encouraged to decrease or stop their use of particular goods believed to have harmful effects. Programs designed to reduce drug abuse, gambling, and similar types of conception examples. These actions have been undertaken by government agencies non profit organisations, and other private groups. The term “demarketing” refers to all such efforts to encourage consumers to reduce their consumption of a particular product or services.

5) Consumer behaviour and consumer education: Consumer also stands to benefit directly from orderly investigations of their own behaviour. This can occur on an individual basis or as part of more formal educational programs. For example, when consumers learn that a large proportion of the billions spend annually on grocery products is used for impulse purchases and not spend according to pre planned shopping list, consumers may be more willing to plan effort to save money. In general, as marketers that can influence consumers’ purchases, consumers have the opportunity to understand better how they affect their own behaviour.

Importance of consumer behaviour:

1) production policies: The study of consumer behaviour effects production policies of enterprise. Consumer behaviour discovers the habits, tastes and preferences of consumers and such discovery enables and enterprise to plan and develop its products according to these specifications. It is necessary for an enterprise to be in continuous touch with the changes in consumer behaviour so that necessary changes in products may be made.

2) Price policies: The buyer behaviour is equally important in having price policies. The buyers of some products purchase only because particular articles are cheaper than the competitive articles available in the market.

3) Decision regarding channels of distribution: The goods, which are sold and solely on the basis of low price mast and economical distribution channels. In case of those articles, which week T.V. sets, refrigerators etc. Must have different channels of distribution. Thus, decisions regarding channels of distribution are taken on the basis of consumer behaviour.

4) Decision regarding sales promotion: Study of consumer behaviour is also vital in making decisions regarding sales promotion. It enables the producer to know what motive prompt consumer to make purchase and the same are utilised in promotional campaigns to awaken desire to purchase.

5) Exploiting marketing opportunities: Study of consumer behaviour helps the marketers to understand the consumers needs, aspirations, expectations, problems etc. This knowledge will be useful to the marketers in exploiting marketing opportunities and meeting the challenges of the market.

6) Consumer do not always act or react predictably: The consumers of the past used to react to price levels as if price and quality had positive relation. Today, week value for money, lesser price but with superior features. The consumers response indicates that the shift had occurred.

7) Highly diversified consumer preferences: This shift has occurred due to availability of more choice now. Thus study of consumer behaviour is important to understand the changes.

8) Rapid introduction of new products: Rapid introduction of new product with technological advancement has made the job of studying consumer behaviour more imperative. For example, the information Technologies are changing very fast in personal computer industry.

9) Implementing the “Marketing concept”: This calls for studying the consumer behaviour, all customers need have to be given priority. Thus identification of target market before production becomes essential to deliver the desired customer satisfaction and delight.

Applications of consumer behaviour: 

1) Analysing market opportunity: Consumer behaviour study help in identifying the unfulfilled needs and wants of consumers. This requires examining the friends and conditions operating in the Marketplace, consumers lifestyle, income levels and energy influences. This may reveal unsatisfied needs and wants. Mosquito repellents have been marketed in response to a genuine and unfulfilled consumer need.

2) Selecting target market: Review of market opportunities often helps in identifying district consumer segments with very distinct and unique wants and needs. Identifying these groups, behave and how they make purchase decisions enable the marketer to design and market products or services particularly suited to their wants and needs. For example, please sleep revealed that many existing and potential shampoo users did not want to buy shampoo fax price at rate 60 for more and would rather prefer a low price package containing enough quantity for one or two washers. This finding LED companies to introduce the shampoos sachet, which become a good seller.

3) Marketing-mix decisions: Once unsatisfied needs and wants are identified, the marketer has to determine the right mix of product, price, distribution and promotion. Where too, consumer behaviour study is very helpful in finding answers too many preplexing questions. The factors of marketing mix decisions are: i) product ii) price iii) promotion iv) distribution

4) Use in social and non profits marketing: Consumer behaviour studies are useful to design marketing strategies by social, governmental and not for profit organisations to make their programmes more effective such as family planning, awareness about AIDS.

An important worth-mentioning information on types of consumer behaviour as given by Henry Assael has been reproduced here. Consumer decision making varies with the type of buying decision. There is a great difference between buying toothpaste, a tennis racket, a personal computer and a new car.

The more complex and expensive decisions are likely to involve more buyer deliberation and more buying participants. Henry Assael distinguished four type of consumer buying behaviour based on the degree of buyer involvement in the purchase and the degree of differences among brands.

The four types are:

(1) Complex Buying Behaviour:

Consumer go through complex buying behaviour when they are highly involved in a purchase and are aware of significant differences existing among brands. Consumers are highly involved in a purchase when it is expensive, bought infrequently.

Risky and highly expensive. Typically, the consumer does not know much about the product category and has much to learn. For e.g. – a person buying a personal computer may not even know what attributes to look for.

This buyer will pass through a cognitive learning process. It is characterized by first developing beliefs about the product, then moving towards attitudes towards the product, and finally making a deliberate purchase choice, the marketer of high-involvement product has to understand the information-gathering and evaluation behaviour of high-involvement consumers.

He needs to develop strategies to assist the buyer in learning about the attributes of the product class, their relative importance and the high standing of his brand on the more important attributes. He needs to differentiate the features of his brand, and enlist sales personnel and the buyer friend to influence the final brand choice.

(2) Buying Behaviour Reducing Dissonance:

Sometimes the consumer who is highly involved in a purchase sees little difference in the brands. His high involvement is based on the fact that the purchase is expensive, in-frequent and risky. The buyer will shop around to learn what is available but he will buy fairly quickly because brand differences are not pronounced.

He may respond primarily to a good price or the convenience of purchasing at time or place. For e.g. – carpet’ buying is an involving decision because it is expensive and relates to self-identification, yet the buyer is likely to consider most carpeting in a given price range to be the same.

The consumer might experience past purchase dissonance due in noticing certain disquiet features of the carpet or hearing favourable things about carpets. He starts learning more things and seeks to justify his or her decision to reduce the dissonance. He passes first through a state of behaviour, acquires some new benefits and ends up evaluating his choice favourably.

In this situation pricing, good location and effective sales personnel are important influences of brand choice. The major role of market communication is to supply beliefs and evaluations that help the consumer feel good about his or her choice after the purchase.

(3) Buying Behaviour Based on Habits:

Many products are purchased under conditions of low consumer involvement and the absence of significant brand differences. For example- in purchase category. They go to store and reach for the brand, having no strong brand loyalty. They have low involvement with most low cost, frequently purchased products. Their behaviour in these cases does pass through the normal belief/attitude/behaviour sequences. They do not search extensive information about the brands.

They evaluate their characteristics and make a weighty decision on which one to buy. They are passive recipient of information as they watch T.V. or see a print ad. Ad repetition creates brand familiarity rather than brand conviction. Consumers do not really form an attitude towards a brand but select it simply because of its familiarity.

After purchase, they may not evaluate it because they are not involved with the product. So in the buying process, brand beliefs are formed by passive learning and followed by purchase behaviour, which may be or may not be followed by evaluation.

In case of low involvement products marketers with few brand differences find it effective to use price and sales promotions are an incentive to product trial, since buyers are not highly committed to any brand. A number of things should be observed in advertising a low involvement product. The ad copy should street only a few key points.

Visual symbol and integer are important because, they can be easily remembered and associated with the brand. The ad campaigns should go for high repetition with short- duration messages. Television is more effective than print-media. It is a low involvement medium that is suitable for passive learning.

(4) Variety-Seeking Buying Behaviour:

Some buying situation depicts low consumer involvement but significant brand differences. Consumers are often observed to do a lot of brand switching. For example in purchasing cookies the consumer has some beliefs, chooses a brand of cookies without much evaluation and evaluates it during consumption. In future, the consumer may reach for another brand out of boredom or a wish to experiment. Here brand switching occurs for the sake of variety rather than dissatisfaction.

In this product category and the minor brands the marketing strategy is different for the market leader who will try to encourage habit of buying behaviour by dominating the shelf space, avoiding out-of-stock conditions and sponsoring frequent reminder advertising, on the other hand, challenging firms will encourage variety by offering lower prices, deals, coupons, free samples and advertising that features reasons for trying something new.

If there is one name that stands out for trust and integrity, it’s Ratan Tata. Born on 28 December 1937 in Surat, Ratan Naval Tata was the chairman of Tata Group, the Mumbai-based conglomerate from 1991–2012.

He has been awarded Padam Vibhushan and Padam Bhushan in the year 2008 & 2000 respectively for his contribution towards trade and industry. Known for his vision and ability to lead and innovate, he led the global foray of the largely India-based Tata Group. The 78 year old began his career with the Tata Group in 1961, and spearheaded the company from a $1.5 billion market cap to a $100 billion market cap. The legendary scion has been an inspiration for leaders across the world.

Here are the 10 Success lessons from Ratan Tata for entrepreneurs,

1. Be a visionary

When Ratan Tata joined the group, it was barely doing any business outside India. Even though many opposed him, he maintained that the company had to go global. Today half of Tata’s revenues come from overseas. Under his leadership Tata acquired brands like Tetley, Jaguar Land Rover, and Taj Boston.

2. Be humble

He is known for his humility, and there are countless examples. He started out working as a blue collar employee for Tata Steel. He personally visited the families of the 80 employees who were affected because of the 26/11 attacks. He remembers almost everyone by their first names, and is not dismissive.

3. Never give up on values

Values are something that define a company, both to its employees and its customers. Public Safety and welfare has always been one of the main core values of Tata. The Tata Group has always been known for upholding these values and when Ratan Tata took the reigns, he too reinstated these values into the company culture. As a result, Tata has become one of the most trusted brands the world over.

4. Take Risks

Taking risks is the cardinal rule of business. As a leader, one needs to have the foresight and the capability to take risks that can take the company to new heights. Coming from business family, Ratan Tata was no stranger to taking risks and once also said, “I don’t believe in making right decisions. I take decisions and then make them right.” From acquiring the Jaguar and Land Rover businesses from Ford to taking over Corus, the second-largest steel maker in Europe, Ratan Tata made significantly big moves and has managed to make things work in his favour.

5. Motivate others

Ratan Tata had the ability to inspire and motivate others which is very important for a leader. Being a great leader isn’t about checking all the right boxes but is about making sure you inspire, drive and spark your drive in others, so that they along with you, can bring about change, social innovation and progress.

6. Have faith in yourself

When you are dealing with life’s hodgepodge, every minute you take a decision. Some decisions are right while there are some decisions that may cause situations to take an unpredicted turn. At such junctures, before people lose faith in your decision making skills, you must have staunch belief in yourself and must confidently come forward to make the situation in your favour.

7. Be open to criticism

As per a famous quote by Ratan Tata, ‘Take the stones people throw at you and use them to build a monument.’ Whenever you endeavour to do something you like, you won’t always receive appreciation. There will be people who will try to pull you down and criticize to shatter your spirit. All you need to do is just ignore all the criticisms and focus on your work.

8. Use creative tendencies

Be creative rather than being reactive. Being proactive and solving problems even before they come is one of the most important qualities of an entrepreneur. A person should not have a tendency to react only when the situation demands but the person should be able to be anticipate what will happen in future and be able to adjust himself to it in present. An entrepreneur who exercises such quality is always successful.

9. Get out of the safe mode

To be successful in business you need to take risk. No risk no gain. Mr. Ratan Tata always believed in taking risk and the result is clear that the risk paid off. To be successful you need to take risk working in safe mode might make you feel comfortable but you will never be able to get best out of the system. He once said “I don’t believe in making right decisions. I take decisions and then make them right,”

10. Don’t put all your eggs in one basket

Mr. Ratan Tata believed in investing in different companies so as his investment is always safe. He acquired a stake in the growing Chinese giant Xiaomi and leading e-commerce site snapdeal. Investing in different companies ensures that your investment is safe and grows no what the situation of a particular industry is.

Read About JRD Tata

IT in India would have never been the way it is without one man: N.R. Narayana Murthy.

A chief founder of India’s largest (and most respected) IT company Infosys, he is one of prominent architect of information technology in India. Not many people would know that Mr. Murthy borrowed Rs 10,000 from his wife to start Infosys. But we all know the success story Infy (as it is fondly called) now is and it’s largely owing to the astute leadership and vision of one man.

After serving as the CEO of the company for more than two decades (1981-2002), he retired to the post of Chairman Emeritus in 2011. A recipient of numerous prestigious awards like the ‘Padma Vibhushan’, ‘Legion of Honour’ (awarded by the French government), Mr. Murthy continues to serve on the board of HSBC, Ford Foundation and the UN Foundation.

He has been constantly ranked high among top business leaders/influential personalities by renowned media organizations like The Economist, Time, CNN etc. Not only is he an IT wizard, he has successfully led key corporate governance initiatives in India. He is an IT advisor to several Asian countries. His leadership lessons are most sought-after, not only by Indians but even by managers in other countries.

We bring you his insightful and thought-provoking advice on some core concerns which confront almost every manager. However, if one reads between the lines, his lessons can be relevant for not just entrepreneurs and managers but almost everybody: students, army men, artists, and even housewives, that is anyone who aspires to make it big in his/her respective field.

Here is some amazing leadership-oriented advice from N.R. Narayana Murthy:

On Adversities and Challenges

Mr. Murthy espouses that one of the leader’s core jobs is to raise the confidence of the followers. Tough time and challenges are essential parts of the life and they will come out better at the end of it. According to him, a leader has to sustain followers’ hopes and their energy levels to handle the difficult days.

Mr. Murthy often quotes the example of Winston Churchill to stress on this point. Churchill’s gutsy leadership as prime minister for Great Britain successfully led the British people away from the brink of defeat during World War II. He raised his people’s hopes with the words, ‘These are not dark days; these are great days the greatest days our country has ever lived.’ Mr Murthy says that during a time of crisis a strong leadership is needed more than ever.

On Being a Successful Entrepreneur

Mr. Murthy suggests these four essential qualities for entrepreneur to make it big:

• Passion and will to persevere
• Giving more priority to the long-term interests
• High levels of optimism and high aspirations
• Being a team player
• On Starting a New Venture

According to Mr. Murthy, these four things can be instrumental in launching a venture:

• The Idea: One should have a clear, well-defined idea of the product/service he wants to sell.
• Market value of the idea: One must have a basic level of confidence in the fact that the market values your product and is willing to pay for it.
• Team: One must have a team of “complementary skillsets”. A team may be composed of people with varied skillsets but they must complement a common cause.
• High Aspirations: Aim high and work hard for that.

On Building Trust

Mr. Murthy is of the view that trust and confidence can only come when there is a premium on transparency. “The leader has to create an environment where each person feels secure enough to be able to disclose his or her mistakes, and resolves to improve,” he emphasizes. He further adds that even investors respect the organisations which are transparent and have high degree of credibility. He says, “At Infosys, our philosophy has always been, ‘When in doubt, disclose.’”

On Values

Mr. Murthy has always highighted importance of a value system in an organization. And, compliance to a value system creates the environment for people to have high aspirations, self-esteem, belief in fundamental values, confidence in the future and the enthusiasm necessary to take up apparently difficult tasks. What he’s really stressing here is that having a value system is not all. Leaders have to follow it themselves and thus lead by example. As they say, “they have to walk the talk.”

On Work Life Balance

Mr. Murthy doesn’t really identify with the concept of work life balance. He had once said, “First let’s make a life, then think about work-life balance. I don’t understand the concept of a work-life balance.”

On Success

Mr. Murthy’s definition of a successful person is “one who when he/she walks into a room, people’s eyes light up. If he/she brings a smile to people’s faces, then irrespective of whether that person is educated, not educated, self-employed, employed, I would still consider that person to be successful.”

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Dhirajlal Hirachand Ambani, better known as Dhirubhai Ambani, is not an unheard name to any Indian. From being a spice dealer at fifteen to a cloth merchant to a textile producer, it was his enthusiastic ambition and inexhaustible energy that led him overcome all obstacles to emerge out as a business tycoon possessing the loftiest potential not only in India but also worldwide; someone that every entrepreneur dreams of becoming someday.

He’s the founder of Reliance Industries, India’s largest private sector petrochemical and textile giant. Apart from being awarded many prestigious awards including the “Padma Vibhushan”, he was also conferred “Man of the 20th century” by FICCI. A poll conducted by “The Times of India” during the dawn of 21st century voted him as The Greatest creator of wealth in the Centuries.

Dhirubhai, a Gujarati at heart, was raised in frugal living conditions right from an early age. He was aware of the inefficiencies that the family dealt with due to the meager income his father had. A lot can be learnt from him as an entrepreneur. Let us explore and get ourselves enlightened.

Start Small. Grow Big!

He started a partnership firm named “Majin” with his cousin Champaklal Damani. The very task of the company was to import polyester yarn and export spices to Yemen. The first office of Reliance Commercial Corporation was a 350 sq. feet room with one telephone, one table, three chairs and two office assistants. Both of them had different temperaments of work and take on how to do business. Unlike Damani, Ambani was a known risk-taker and believed in building inventories. The partnership, however, collapsed.

Just a year after then, Dhirubhai founded the Reliance Industries. It was through his futuristic vision and unfathomable business acumen that the company soared to great heights. It created a history in the Indian Industry, a legacy that would serve as an inspiration for generations to come.

No wonder, today the Reliance Industries is world’s largest manufacturer of polyester and it processes 2% of world’s transportation fuel.

One Life. One Goal!

Socialism and politics attracted 16-year old Dhirubhai, who started dreaming about a new and progressive India, where industries would develop at an unprecedented rate. He was ready to do his bit for his country and himself. It was his passion and active political involvement that brought him to the notice of political leaders. Though he was offered a place in one of the parties, he declined the offer, in order to walk on the route of his true forte. This is what every entrepreneur should do. Do not let anything deviate you!

CREATE equal opportunities. It builds trust!

You and your team share the same DNA. Dhirubhai always had immense faith in his team and people he worked with. He was quite fond of hearing their ideas openly. To be marked successful as an entrepreneur, focus on creating a team of people whose capabilities can be trusted implicitly. Sometimes even just asking the team and discussing can motivate everyone. Dhirubhai firmly believed that if you take care of a team then they will in turn do wonders for you.

Aloofness and an air of exclusivity in order to make things work can be good ingredients to disastrous scenarios for an entrepreneur in the long run.

Change for development

Innovation is life. Moving from one level or domain to another are crucial for any entrepreneur to nurture his business. The hunger to change and the desire to expand made Dhirubhai grow at a rampant and unbelievable pace. Excellent service was its hallmark and trust became an important factor when people traded with Reliance. A determination to change constructively can bring about positive developments. This will foster a lot of connectivity with people who would like to do business with you.

Be Bold. But be Calculative too!

The level of risk drops down if the mathematics behind it is logical. This is the quality most entrepreneurs need to inculcate within them in order to make the most out of an opportunity.

Dhirubhai believed in the concept of economics which says, “More the supply, greater is the demand”. Indubitably, this also meant a huge investment. Then it was his gut instinct and risk taking ability which took him where every entrepreneur dreams to be. Returns are important but that shouldn’t be the soul aim of a budding entrepreneur. Earning a reputation will ultimately bring in the profits.

Having a great niche

He achieved what almost everybody would consider impossible. In a life, spanning 69 years, he built from scratch India’s largest privately controlled corporate empire. Extensive marketing of the brand in the interiors of India made it a household name.

There is a very interesting story of their trial back in 1982, when the Reliance industries was up against a rights issue regarding partly convertible debentures. Rumors were out that the company was making all efforts to ensure that their stock prices did not slide an inch. The Bear Cartel (a group of stock broker that expected the market to fall, unlike the Bull Cartel) sensed an opportunity here and hence, started short selling the shares of Reliance.

The Bulls, on the other hand, started to buy the short sold shares of Reliance Industries on the Bombay Stock Exchange. The Bear Cartel was acting on the firm belief that the Bulls would be short of cash to complete the transactions and would be ready for settlement under the “Badla” trading system operative in the BSE. Their strategy failed mysteriously.

It was then when Dhirubhai intervened and provided the share holders with the physical delivery of the share. Initially bought at Rs.152 per share by the Bulls, they demanded an “Unbadla”, or penalty sum of Rs.35 per share. With this the demand escalated drastically and the share price of Reliance shot above Rs.180 in minutes. Voila! This settlement caused enormous uproar in the market.

The Bombay Stock Exchange was totally suspicious of some unfair trade and to find out the truth, it remained closed for three business days. Authorities from BSE intervened in the matter and brought down the “Unbadla” rate to Rs. 2 with a stipulation that the Bear Cartel had to deliver the shares within the next few days. The Bear Cartel bought shares of Reliance from the market at higher price levels and it also learnt that Dhirubhai himself supplied those shares to the Bear Cartel and earned a healthy profit out of the Bear Cartel’s adventure. Though not an academically brilliant student, Dhirubhai displayed exceptional leadership skills. Again something to learn.

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While our parents are typically the ones to teach us life skills, there are others out there who can provide lessons about life skills. Facebook founder Mark Zuckerberg is one of these people whose public experience taught me about what it really means to achieve success. Here are seven life skills that I learned from him, and how you can apply them to your own career:

1. Equanimity

This is a fancy way of saying that Zuckerberg doesn’t lose his cool when he’s under pressure or in a stressful situation. Instead, he calmly approaches even the most difficult situations because anger doesn’t breed success it only serves to alienate or give the impression that someone feels they don’t have control over a situation. Developing this equanimity has helped improve my relationships with employees and colleagues while providing a way to think more clearly about the critical problem or pressures in front of me.

2. Critical thinking

Zuckerberg has noted his interest in always going deeper with an issue or idea in order to really make a difference, be disruptive and maximize the value. As he once said, “I got my first computer in the 6th grade or so. As soon as I got it, I was interested in finding out how it worked and how the programs worked and then figuring out how to write programs at just deeper and deeper levels within the system.” I could see that success only comes from taking the time to think more critically rather than just accepting the first idea that comes to mind.

3. Problem-solving

Zuckerberg has always focused on solving problems. As he noted in a biography about him, “The question I ask myself like almost every day is, ‘Am I doing the most important thing I could be doing?’ Unless I feel like I’m working on the most important problem that I can help with, then I’m not going to feel good about how I’m spending my time.” I knew that, at the heart of every business I considered creating, there had to be a relevant problem that needed solving to help a consumer or a business.

4. Effective communication

While many leaders leave employee communication to others on the team, Zuckerberg has always taken on this role himself. In creating a company that increases communication and interaction between people, it makes sense that he would also take this approach with his employees. Many of those who have worked at Facebook note how he is always walking around, talking to everyone, asking questions and getting to know them personally. When I tried this for myself, I realized how much more willing my team members were to share what was going on, how they felt, and voice any ideas they had for making changes. Keeping open communication with your team not only builds trust but can also help you be a more effective leader.

5. Assertiveness

Zuckerberg is not interested in following or doing things on other people’s terms. As he noted in a Wired Magazine interview, “Sometimes we are going to do stuff that’s controversial, and we’re going to make mistakes. We have to be willing to take risks.” It’s this attitude that proves how a product, service, company and brand can make strides in completely changing an industry. Success doesn’t come from worrying about how something will work; instead, you just have to jump in and do it.

6. Mindfulness

Zuckerberg doesn’t let his critics get to him. I learned that the ability to ignore the noise around me has helped me to use the energy I would have wasted on worrying about what others thought of me. I use it to fuel creativity, innovation and actions that have furthered my business success. Taking a mindful approach to what you want to accomplish and blocking out the rest is critical.

7. Vision

In recent years, Zuckerberg has become more involved in shaping the global business landscape, illustrating that he is more than just a “one-hit wonder.” His recent address at the United Nations noted the need to expand Internet access to developing nations, illustrating his interest in the future of human rights and social issues. Zuckerberg has also met with country leaders as part of his vision for shaping future generations and helping tackle various global social problems. I value his leadership style and encourage those working in technology to follow suit in taking on a bigger role in real-world issues, rather than relying on politicians to do it for us.